IUL vs 401(k): Which Is Better for North Miami Business Owners?
Your 401(k) is fully taxable in retirement. An IUL, done right, is not. Here's when each wins for Miami business owners.
What an IUL actually is
Permanent life insurance whose cash value is linked to a stock index (usually the S&P 500). You get market-linked growth with a 0% floor — you never lose principal to a market crash.
Tax treatment: the big difference
401(k)/IRA: tax-deferred contributions, taxed withdrawals. IUL: after-tax contributions, tax-free loans against cash value in retirement. Florida has no state income tax, but federal rates still apply.
Contribution limits
401(k) caps at $23,500 in 2026. IUL has no IRS contribution cap — you fund based on the death benefit and MEC rules, useful for high-earning North Miami business owners.
When 401(k) wins
If your employer matches, ALWAYS take the match first — that's 100% instant return no IUL can beat.
The right stack
Most successful North Miami clients I work with do: max the 401(k) match, then fund an IUL for tax-free supplemental income, then a Roth if under the income limit.